According to the Canadian Real Estate Association (CREA), robust sales in a few pricey areas of Greater Vancouver in 2011’s first quarter bolstered nationwide home prices with an increase of 8.9% year over year.
“A record number of multimillion-dollar property sales in Richmond and Vancouver West are pushing up average prices for Greater Vancouver, British Columbia and nationally,” stated Gregory Klump, CREA's chief economist. “If Vancouver is excluded from the equation, the national average price increase is cut by more than half to 4.3%.”
Additionally, national sales activity in the first quarter of 2011 was up 4.5% from levels recorded in the fourth quarter of last year and reached the highest quarterly level in a year. However, most of the increase was due to demand in Vancouver and Toronto.
The CREA believes recent changes to mortgage regulations may have caused some sales in Canada's more expensive housing markets to be brought forward into the first quarter – something that would not have otherwise occurred later in the year.
“Looking ahead, evidence suggests that the potential rush of sales activity in March before recent changes to mortgage regulations took effect was a story that was largely focused in condo sales activity in Greater Vancouver,” Klump noted.
“This confirms that the expected impact on sales activity [from] recent changes to mortgage regulations will likely be minor over the near term. Interest rates are now widely expected to remain on hold until at least mid-July, which is supportive for resale housing demand, market balance and prices.”
Steady sales activity, combined with fewer new listings, tightened the national resale housing market. The national sales-to-new listings ratio, a measure of the balance between supply and demand, stood at 56.5% in March.